How to Determine Car Insurance Liability Limits


Learn the minimum liability limits required by your state.


Determine your assets. Insurance is meant to protect what can be lost in a lawsuit.


Think about the ages of the drivers in your household. Youthful drivers have more accidents resulting in lawsuits.


Realize you share liability for your children until they reach a specific age.


Consider your profession. If you work in the public eye or if you work in a profession perceived to have high income, you're likely to face larger lawsuits.


Understand that numerous cars on the road are worth more than the $25,000 property damage limits afforded by a basic policy.


Realize that you may be liable for damage to more than one vehicle if you cause a chain reaction accident.

Tips and Warnings

  • Car leasing companies may require specific liability limits.
  • If you use your car on the job, your employer may demand high limits.
  • "25/50/25" means your insurance company will pay up to $25,000 if one person is injured or killed, $50,000 if more than one person makes a claim and up to $25,000 in property damage.
  • Consider a personal liability umbrella policy instead of boosting your car insurance to the maximum limits if you have significant assets.